I just landed a great job here in Dallas Texas and I thought it may be a good idea to tell my parents that I’ll be paying for my own insurance premiums. But I’m actually wondering if it would be better to put my insurance premiums in a savings or time deposit. What are the advantages of whole life insurance anyway?
Tracy
Dallas Texas
Congratulations for landing a great job in Dallas, Tracy. I’m sure your parents will be pleased that you have thought about paying your own insurance premiums. Although opening a bank account is essential, you should also be aware about the advantages of whole life insurance. It may be a fact that higher annual premiums often alarms younger clientele away. But the reasons behind this are provided by recognizing the advantages of whole life insurance:
- Policy designed to last for your entire life- your premiums will not increase as you get older and your death seems more likely. The policy is going to remain constant regardless if you become ill with a serious disease. You are covered by the insurance for as long as you pay the premiums.
- Guaranteed “cash value” along with a death benefit – it builds a cash value. Here, your policy acts both as a savings and investment account while providing insurance against death. This is a benefit from the fact that you pay your life insurance premiums long before you pass away. This is simply saying your money is doing multiple things.
- Applies the Infinite Banking Concept- you are actually paying two amounts in a whole life insurance. First the basic life insurance and the second is some extra investment capital. Depending on the type of policy, the cash value can serve as a type of tax deferred savings. It also creates an opportunity for additional retirement assets and can be a source of emergency funds.
I hope I was able to explain the advantages of whole life insurance so that you will continue your policy and maximize its benefits.